United States President Donald Trump’s administration has opened a criminal investigation into Federal Reserve Chair Jerome Powell, a development set to heighten concerns about the independence of US monetary policy.
Powell said on Sunday that the US Department of Justice had served the Fed with subpoenas over testimony he made before Congress related to the $2.5bn renovation of the central bank’s headquarters in Washington, DC.
Powell said concerns about the renovation project were “pretexts” to undermine the central bank’s independence in setting interest rates.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said in a rare video message.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions – or whether, instead, monetary policy will be directed by political pressure or intimidation.”
Powell added that he had carried out his duties “without political fear or favour” and with the sole purpose of upholding the central bank’s dual mandate of price stability and maximum employment.
“Public service sometimes requires standing firm in the face of threats,” he said.
“I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
Trump has repeatedly threatened to fire Powell over his refusal to cut interest rates faster, and is waging a legal battle to remove Lisa Cook, Powell’s fellow board governor, after ordering her removal in August.
